Examinations: Overview

Examinations are fundamental to the supervision of national banks. Examiners evaluate bank activities and management processes to ensure that banks

Operate in a safe and sound manner — do not take excessive risks; and

Comply with laws and regulations

What is a bank examination?

The OCC examines national banks pursuant to the authority conferred by 12 USC 481 and the requirements of 12 USC 1820(d). These requirements establish minimum frequencies and scopes for examinations, known as the "supervisory cycle."

Two basic examination types:

Full-scope, on-site review of bank

Occurs once every “supervisory cycle” (generally, every 12–18 months)

Focuses on three main areas:

Competence of bank management

Quality of bank assets, principally loans (“safety and soundness”)

Compliance with federal banking regulations

Review of specialty areas. Examiners are also required to ensure a bank is meeting its legal obligations in the following areas: